By Vivian A. Gray JR.Contributor
MONEY LAUNDERING is the processing of criminal proceeds to disguise its illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardising their source.
Illegal arms sales, smuggling and the activities of organised crime, including for example drug trafficking can generate huge sums. Embezzlement, insider trading, bribery and computer fraud schemes can also produce large profits and create the incentive to "legitimise" the ill-gotten gains through money laundering. When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.
In response to mounting concern over money laundering, Jamaica and other territories in the region have implemented legislation aimed at its prevention and the Jamaican Money Laundering Act came into being in 1996
By its very nature, money laundering occurs outside of the normal range of economic statistics. Nevertheless, as with other aspects of underground economic activity, rough estimates have been put forward to give some sense of scale to the problem.
How is money laundered?
In the initial or placement stage of money laundering, the launderer introduces his illegal profits into the financial system. This might be done by breaking up large amounts of cash into less conspicuous smaller sums that are then deposited directly into a bank account, or by purchasing a series of monetary instruments (cheques, money orders, etc.) that are then collected and deposited into accounts at another location. After the funds have entered the financial system, the launderer engages in a series of conversions or movements of the funds to distance them from their source. The funds might be channelled through the purchase and sales of investment instruments, or the launderer might simply wire the funds through a series of accounts at various banks across the globe. This use of widely scattered accounts for laundering is especially prevalent in those jurisdiction that do not co-operate in anti-money laundering investigations. In some instances, the launderer might disguise the transfers as payments for goods or services, thus giving them a legitimate appearance.
In Jamaica, a person is taken to engage in Money Laundering on three grounds. Firstly, if he acquires, possesses, uses, conceals, disguises, disposes or brings into Jamaica, any property obtained from the commission of `certain offences (see below). Secondly if he converts or transfers that property or removes it from Jamaica, and finally, if that person engages in a transaction that involves property obtained by committing any of the following offences:
The production, manufacture, extraction, preparation, distribution, sale, delivery, transport, importation or expropriation of any narcotic drug or any psychotropic substance;
The cultivation of opium, cocoa bush, cannabis (ganja);
Possessing or through the purchase of any drug or psychotropic substance for the purpose of the purposes specified in 1 above;
Transportation, importation or expropriation of firearms;
Any offence involving fraud, dishonesty or corruption;
The organisation, management or financing of any of the above offices;
Publicly inciting or inducing others to commit any of these offences or conspiracy to commit, aiding, abetting, procuring or counselling the commission of any of the offences.
It must be proved however, that the person charged knew at the outset of the transaction that the property is derived or realised directly or indirectly from the commission of the specified offence.
This is the first of a two part article on money laundering.
